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Macquarie analyst Michael Wiblin said Mr Elstone’s decision to step down added to the belief that a deal would not be completed any time soon.

“Given the planned departure of the current CEO, we now believe it highly unlikely that any of these propositions will be progressed in the short to medium term," he said in a report to clients.

Mr Wiblin, who believes the ASX’s deputy chief Peter Hion would be in the running for the top job, said Mr Elstone’s departure contributed “another source of uncertainty" for the stock exchange.

“ASX will now face uncertainty around its strategy given a new CEO," he said.

Mr Elstone’s decision to move on comes at a crucial time for the ASX as it prepares to face competitors for the first time. As part of government reforms to financial markets, rival stock exchanges are being allowed to set up in opposition to the ASX, breaking its long-held monopoly over share trading.

The ASX, which has opposed the move, has argued it presents a serious threat to market integrity and exposes Australia to “flash crashes" of the sort that wiped $US1 trillion off Wall Street stocks earlier this year.

In a speech to shareholders this week, ASX chairman
David Gonski said
there would be serious consequences to opening the door to other exchanges.

“Increased volatility and flash crashes are an inevitable consequence of fragmentation," he said.

“Realistically, all we can do is moderate their impact at the edges, not eliminate them."

Wall Street’s Dow Jones index plummeted almost 1000 points in a matter of minutes on May 6 in an unexpected disruption dubbed the flash crash.

US regulators are close to finalising a report into the crash that is expected to be closely read by Australian authorities, who are drawing up rules on how competition between rival stock exchanges will work in the local market.

A preliminary report by the US Securities and Exchange Commission earlier this year concluded the multiple exchanges operating in America had contributed to the May 6 disruption.

Concern about the causes of the flash crash has delayed the approval process for Chi-X, an electronic stock exchange that has applied for a licence to move into Australia and compete with the ASX.

Mr Williams said the delays had helped the ASX, but noted a degree of uncertainty would continue to shroud the company until there was more clarity on the issue.

“The delays have allowed the ASX time in terms of delivering competitive pricing and technology," Mr Williams said.

“The flip side is that the market sits back and has this uncertainty veil over the ASX.

“In some ways it would be better that we get on with it and then we could value the ASX better."